​ZTE - What is Steve Mnuchin Up To?

Let us not be shocked by the fact that China is stealing and bullying it’s way towards very specific geo-political goals. Geo-politics. It’s not a term that is in as much usage as it might have been a generation or two ago. Geo-politics. Older (mostly) men leaning over a map in a windowless concrete bunker with a solitary lamp overhead throwing a slightly sinister cone of light over the proceedings. A little old-fashioned? Yes.

But geo-politics still matters, especially in a natural-light filled conference room with someone like Nicky Haley or Condoleeza Rice (please come back!) running the show. It's more like geo-politics has become the machine code, the neo-cortex of the nation-state's consciousness - still working deep down below but overlaid by all sorts of newer languages. Like global flows of capital, or technology transfer, research and innovation, or multilateral versus bilateral trade agreements.

All of those languages matter. But let's consider them a little further:

You need both transparent and reasonably unhindered flows of capital. China provides little of either with it's tightly controlled currency as well as its capital controls.
You should have a working system of intellectual property rights that provide royalties or any other agreed-on revenue stream for innovations that people like, need, and want to purchase or rent. China notoriously disregards any intellectual property right it finds a hindrance to it's inexorable, socialist-mercantilist goal of being the world's leader in tech. Plus it's theft of high-tech patents and secrets is somewhat at odds with upholding property rights. Don't ya think?
Trade with China is far from free. Unlike Japan (or to a lesser extent, South Korea), who since the end of WW II and the Korean War have generally attempted to play by the rules (if not always following suggested policy prescriptions), China makes any trade agreement conditional. You want access to our market? You will have to pay, and sometimes dearly. Just look at Google or Apple's behavior in China compared to how they conduct business at home.
Why this constant flouting of the World's multilateral trade arrangements? China's vision of geo-politics is the hardly-secret code that runs their trade machinery. It is the "primitive" as a cryptographer or a game theorist might say. So, given this primitive, how do you negotiate with China?

In Trump's administration, it depends on who you talk to. For instance, Steve Mnuchin at Treasury apparently has been slow-walking intended sanctions that are to be, or were to be, levied on China. On the other side of the issue is Peter Navarro, who seems to have had a heated confrontation with Mnuchin at their hotel in China. Good teamwork guys. Just what's needed to throw the Chinese off their guard. One assumes that Navarro wanted to be sure that Mnuchin wasn't giving the house away to China. Which he perhaps is in fact doing, if you believe Derek Scissor's piece at the American Enterprise Institute. Scissors accuses Mnuchin of failing to impose sanctions on ZTE - the Chinese telecommunications giant that has broken the law and sold technology to both Iran and North Korea. He states:

If there's good news, it's that the Trump administration has fallen silent on whether the US will bend our law for China in the ZTE case, which got so much attention last week. That would be a big step backward.

But even if we hold firm on ZTE, the rest is all too familiar. The vague-to-the-point-of-useless deal and complete absence of American action could have been pulled straight from the Obama or Bush administrations. Secretary Mnuchin is perfectly imitating former Treasury Secretaries Lew, Geithner, and Paulson, who led us here.

Senator Marco Rubio has been a strong voice as well, tweeting out criticisms of the Trump administration possibly surrendering to China and ZTE. And more than a few GOP Senators and others are expressing their concern over a possible sell-out deal to China.

Did Mnuchin convince President Trump to backpedal on sanctions? Or is there a good-cop/bad-cop routine going on? On Fox News Sunday, Mnuchin said this:

We're putting the trade war on hold, so right now we have agreed to put the tariffs on hold while we try to execute the framework.
Really? What framework? Whose framework? Larry Kudlow and Robert Lighthizer pushed back, with Kudlow on MSNBC stating:

You cannot remove tariffs as a negotiating tool or an enforcement tool from this process.

It seems a bit of a stretch to think this is a well-thought out approach with Mnuchin dangling carrots and Kudlow and Lighthizer brandishing a big stick. More like this is policy being forged through competing approaches brawling it out at hotels in enemy territory. As well as through talk shows and tweets. Yes, that has been Trump's style of doing business, but one hopes that Mnuchin gets the importance of making China understand that its behavior is unacceptable. Can America do that while avoiding a trade war? Given China's underlying geo-political vision of its role in Asia and the globe, that will be a nearly impossible balance to strike. A little less frantic fights in your host country would be a start.

The twit in chief. The policy is whatever benefits his own “brand” most. China knows this. Well, everyone in the world knows this except right wingers here, and some of them know it and think it’s just great. Rubio is just talking out of both sides of his mouth. Meanwhile, a guy in NYC is willing to pay a million bucks to get Dumpty’s name off the building he lives in, if the others will chip in, and they all want his name to go away, because it decreases the value of their apartments. Dumpty is decreasing the value of our whole country. The solution is to impeach this crook, preferably yesterday, last week, last month, or last year. Watch out for his right eye. It’s starting to close again, so it’s either infected, or he’s continually having small strokes, and what’s left of his brain can’t take it.

Your yearning for Condoleeza makes it pretty clear that you have no business writing articles in the Third Party & Independent column, now just another far right wing column.

The twit in chief. The policy is whatever benefits his own “brand” most. China knows this. Well, everyone in the world knows this except right wingers here, and some of them know it and think it’s just great. Rubio is just talking out of both sides of his mouth. Meanwhile, a guy in NYC is willing to pay a million bucks to get Dumpty’s name off the building he lives in, if the others will chip in, and they all want his name to go away, because it decreases the value of their apartments. Dumpty is decreasing the value of our whole country. The solution is to impeach this crook, preferably yesterday, last week, last month, or last year. Watch out for his right eye. It’s starting to close again, so it’s either infected, or he’s continually having small strokes, and what’s left of his brain can’t take it.

Your yearning for Condoleeza makes it pretty clear that you have no business writing articles in the Third Party & Independent column, now just another far right wing column.

I find it refreshing that competing opinions dominate this administration. It offers so much more than the lock step obedience to the party line we’ve been experiencing for the last, well, since the Kennedy assassination.

I’m willing to give it a try. If that gives the impression I think it’s just great, maybe I do. I’m also ready to try something new. I’m ready to see if it works first.

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